11 days after its acquisition of CreditGuard, SafeCharge International Group plc (AIM: SAFE), traded at a $615 million market cap, has announced a second acquisition. SafeCharge, which specializes in credit card clearance, has acquired Irish company 3V Transaction Services for €14.5 million ($17.7 million). €11.6 million will be paid when the deal is closed, and the remainder according to milestones over a three-year period.
In contrast to its first acquisition (CreditGuard), whose business was fairly similar to SafeCharge's, the acquisition of 3V Transaction is designed to help SafeCharge begin something new from scratch: the issuing of prepaid cards, a market that SafeCharge says is growing at a 21% annual pace.
3V Transaction, founded a decade ago, has developed technology for issuing , processing, and managing prepaid programs for both physical and virtual cards. The company's technology will be applied in countries like Canada, Ireland, Finland, Germany, the Netherlands, Spain, and the UK, and for customers like Visa Europe and cellular giant O2/Telephonica. 3V Transaction's gift cards can be found in leading store chains in the UK, for example.
Despite its accumulated experience and the growing market in which 3V Transaction operates, it is still not making a profit, and its revenue is negligible: €2.9 million ($3.5 million) last year, while its net loss was €3.2 million ($3.9 million).
It appears, however, that when taken under SafeCharge's wing, 3V Transaction's business is likely to prove profitable. This will be the basis for SafeCharge's issuing division for means of payment, which SafeCharge says is likely to be profitable already in its first year of activity, on the basis of EBITDA.
Published by Globes [online], Israel business news - www.globes-online.com - on December 25, 2014
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